Closing a short sale

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Closing a short sale

Closing short sales can be very exhaustive and straining on your nerves, as it needs not only financial decisions, but also has a great deal of embarrassment and emotional issues attached to it. You and your family will have to go through a lot of problems as you close the deal. It is therefore very important that you be as prepared as you can be, in order to reduce the hassles concerned with a short sale and close the deal as quickly as possible. It is only natural that banks do try to defer a short sale and try to find an alternate path to the entire problem, as short sales are often associated with losses for the lenders and actively involves the loss mitigation department of the bank. The first step towards a closing starts when you initialize proceedings by having discussions with the representative of the bank, who is part of the loss mitigation department.

You need to be really courteous toward the bank official and be your best when it comes to convincing the representative that short sale is the only option that is available with you to repay atleast a good part of the loan amount. Once you are successful at this, the next step is to ensure that the buyer does not back out. This does not happen in most cases, as the buyer is always willing to close a short sale, as he tends top get a good deal when he buys a short sale property. As you approach closing, on issue that may crop up is regarding the payment of closing costs. Most lenders have sympathetic view towards mortgagees’ affected due to short sale issues and even lend a helping hand by taking care of their closing costs to a certain extent. But, lenders are never willing to finance the closing costs of the buyer. This is what turns into a topic for discussion and deliberation. They feel that buyers already have got a good deal by buying a short sale property and hence need no more assistance. The buyer, on the other hand feels that since he is helping the bank close a loan, which otherwise could have become an issue, the bank needs to take care of atleast the closing costs.

This is where your skills come into play. You need to convince the buyer that the bank shall not be in a position to help with is closing costs, in which case, he shall argue that these costs be offset against the sale price. This is also not agreed by the lenders, in most cases. You need to convince the buyer that he is already getting a good deal and hence cannot expect any more concessions. If he is still persistent, and threatens to pull out of the deal, he could be placated with a home insurance or any such additional benefit.

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